Posted on 12/13/2008 5:05:04 AM PST by TigerLikesRooster
Intermission
BY TIM W. WOOD
Major stock averages have retested their 2002 lows, oil hits the 40 dollar mark and the dollar weakens. Does this now mean that it’s over? Has the bear market run its course? Is a new bull market on the horizon? Will oil go back to 140? Will the new administration fix everything? Will 2009 bring in more of the glory days?
/snip
Anyway, I don’t think the bear market is over or that a new bull market has begun and I can virtually assure you that the new administration cannot “fix” the mess we are in. The year 2009 will not be a return of the glory days and oil is not going back to 140 a barrel at this time. This is a massive/global bear market that has been brought on by credit and excesses of the past. The bottom line is, we are now dealing with K-wave winter and I want to again remind you of the signs that occur in this season.
“Global Stock Markets Enter Extended Bear Markets”
Given the performance of the Chinese, US, and other stock averages around the world there should be little doubt about this one.
“Trends During Winter: Stocks Down, Bonds Up, Commodities Down”
I would say that this is occurring.
“Interest Rates Spike In Early Winter Then Decline Throughout”
In June 2004 the Discount rate was at 2.00%. By June 2006 it was at 6.25% and since August 2007 the Fed has been forced to cut the Discount rate back to 2.25%. So, this too seems to fit.
“Economic Growth Slow or Negative During Much of Winter”
I doubt that many will argue that growth is now slow and in many cases negative.
“Commercial and Residential Real Estate Prices Fall”
This obviously began back in 2006 and is still in a major slump.
“Bankruptcies Accelerate and High Debt Eliminated by Bankruptcy”
This has obviously begun and is no doubt related to the housing and credit bubbles.
“Social Upheaval and Society Becomes Negative”
We are only just beginning to see this.
“Banking System Shaken and New One Introduced”
The banking system is now only beginning to be shaken. There should be much more to come.
“Free Market System Blamed and Socialist Solutions Offered”
This has not yet happened, but just wait.
“National Fascist Political Tendencies”
More to come.
"Debt Level Very Low After Defaults and Bankruptcy"
This has not happened.
“Trade Conflict Worsen”
This basically has not happened.
“View of the Future at a Low Ebb”
This has not happened as everyone seems to be looking for the bottom.
“New Work Ethics Develop Since Jobs are Scarce”
If I can assure you of one thing it is that this has not happened.
"Greed is Purged from the System"
I can absolutely assure you that this has not happened yet.
“Real Estate Prices Find Bottom”
This has not happened.
“There is a Clean Economic Slate to Build On”
Not happened yet.
“Investors are Very Conservative and Risk Averse”
Again, this has absolutely not occurred.
“Interest Rates and Prices Bottom”
Not happened.
“A New Economy Begins to Emerge”
Has not happened
“Stock Markets Reach Bottom and Begin New Bull Markets”
Again, we aren’t there yet and I view any relief rallies from these oversold levels merely as intermission.
Ping!
‘“Free Market System Blamed and Socialist Solutions Offered”
This has not yet happened, but just wait.’
What?!? What the HECK are the $7 TRILLION in bailouts if not a “socialist solution”? The government won’t even tell us where $2 TRILLION in loans went!
The shameful thing is this enormous ‘transfer of wealth’ with virtually no oversight or approval. I’d be very grateful if someone who understands more of the details would tell me how much real inflationary pressure the bailouts have put on the economy. Inflation is a way of robbing everyone with savings. I understand we’re not looking at any kind of classic inflationary pressure _at the moment_.
At any rate, this has at least limited the damage 0bama can do in some areas. It also gives him big ammunition for things like cutting military programs. :-/
“It also gives him big ammunition for things like cutting military programs.”
Yea - but that’s happening anyway. The interesting part is when the cuts come home to rooooooooost, and thousands of soldiers lose their lives...then he’ll have to answer.
And the sound of the ca-ca hitting the fan pierces the night.
Santa Claus rally.
Keep your cash dry. Don’t fire until you see the lows of their buys.
Not sure how that's going to happen when Obama will start bringing them home. I wonder what he's going to do about our soldiers deployed in Korea and other parts of the world? Will he eliminate bases in foreign countries so our carrier groups will have to operate strictly from the U.S. and take days to respond to attacks world wide?
There are many references in this article to “Nov. 21, 2007”.
What the heck happened on Nov 21, 2007?
I want a big piece of pie. 0be says I’ll be gettin’ a hugh piece of pie. Where’s my pie?
According to classical Dow theory, the primary bearish trend change finally occurred on November 21, 2007 and I reported that to my subscribers that night. It was at that time that the "stock market barometer," according to William Peter Hamilton, first forecasted "stormy economic conditions."
More thanks to Frank & Dodd.
We gotta be patient for the pie since The Man won't even let the Pied Piper into Blair House yet.
Being a Christian, gun-owning, conservative, hetero, caucasian male, I am certain that any pie Chicago's 12th Imam is able to serve me is going to be the type found wherever cattle are kept, and I'm not likely to be lucky enough for just a "thin slice" of it, either. Just when I thought the cooking out of DC couldn't get any worse than it already had been the last two years...
"Greed is Purged from the System"
If there is still an FR around when this happens anywhere - under any form of government or lack thereof - somebody please ping me, and I will bring the pie.
Mr. niteowl77
“and thousands of soldiers lose their lives”
Yes, but by then, the people who know how to use weapons well will largely be unarmed, dead or incarcerated. Or will have gone ‘missing.’
Buy low.
>>I don’t look for “the turnaround” until 2012 at the earliest. If the administration makes enough major dumb (socialist, tax increase) moves they probably could add a few years to that.
That’s pretty much how the Great Depression came about. Poor moves by a Republican President at the beginning of what should have been a 2-3 year recession, followed by a Dem President and Congress going to town with lots of socialism, turning that 2-3 year recession into a decade-plus long Great Depression.
I get a little depressed looking at how it appears history is likely to repeat itself.
One more...
You know, I am pretty sure that FDR went on TV and ended the Great Depression. My buddy ‘Scranton Joe’ told me.
I thought he was quoting Depression headlines. (We may have to start identifying WHICH Depression we're talking about.)
I have been seeing signs of failure to pay commercial real estate loan monthly payments, let alone the balloon payments. Keeping up with labor costs is proving to be too much for some firms.
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